Corporate Governance and Market Volatility "Tunisian Political Crisis, October 2011”

Abstract

In the context of political crises, the investor pessimistic sentiment increases, and the price changes in stock get amplified, which result some disorder in the financial markets and spectacular falls in share prices.

By analyzing the election period of the Tunisian Constituent Assembly in October 2011, we noticed that political tensions affect differently stock prices.

During the political crisis, some companies showed better resistance than others and have maintained an acceptable level of price volatility. The results show that this resilience is explained by the best practices of corporate governance codes as well as business performance.